Good afternoon, everyone, and welcome to REVOLVE 's Second Quarter 2025 Results Conference call. After the speaker's remarks, there will be a question and answer session. To ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, it's star one again. At this time, I would like to turn the conference over to Erik Randerson, Vice President of Investor Relations at REVOLVE. Erik, you may begin. Good afternoon, everyone, and thanks for joining us to discuss REVOLVE' s second quarter 2025 results. Before we begin, I'd like to mention that we have posted a presentation containing Q2 2025 financial highlights to our investor relations website located at investors.revolve.com. I'd also like to remind you that this conference call will include forward-looking statements, including statements related to our future growth, our inventory balance, our key priorities and business initiatives, industry trends, the impact of tariffs and our mitigation efforts, our marketing events and their expected impact, our physical retail stores, and our outlook for net sales, gross margin, operating expenses, and effective tax rate. These statements are subject to various risks, uncertainties, and assumptions that could cause our actual results to differ materially from these statements, including the risk mentioned in this afternoon's press release, as well as other risks and uncertainties disclosed under the caption "Risk Factors and Elsewhere" in our filings with the Securities and Exchange Commission, including without limitation our annual report on Form 10-K for the year ended December 31, 2024, and our subsequent quarterly reports on Form 10-Q, all of which can be found on our website at investors.revolve.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we'll also reference certain non-GAAP financial information, including adjusted EBITDA and free cash flow. We use non-GAAP measures in some of our financial discussions as we believe they provide valuable insights on our operational performance and underlying operating results. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information presented and prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies. Reconciliations of non-GAAP measures to the most directly comparable GAAP measures, as well as the definitions of each measure, their limitations, and our rationale for using them can be found in this afternoon's press release and in our SEC filings. Joining me on the call today are our Co-Founders and Co-CEOs, Mike Karanikolas and Michael Mente, as well as Jesse Timmermans, our CFO. Following our prepared remarks, we'll open the call for your questions. With that, I'll turn it over to Mike. Hello, everyone, and thanks for joining us today. Outstanding execution by our team within an incredibly dynamic operating environment led to strong second quarter results and continued market share gains. Our net sales increased 9% year- over- year, outpaced by adjusted EBITDA increasing 12% year- over- year, as we delivered our highest adjusted EBITDA margin in three years despite pressure from increased tariff rates. Improved inventory dynamics and our tariff mitigation efforts drove a slight expansion of our gross margin year- over- year, as well as healthy cash flow generation. In fact, our $52 million in free cash flow generated during the first six months of 2025 is nearly 3x the free cash flow we achieved for the full year in 2024. Looking beyond the numbers, I'm excited by the underlying drivers of our strong results that illustrate great progress in key areas of investment for long-term success. Our customer base continues to increase, and on average, we are generating more revenue per active customer helped by a lower return rate year- over- year and our successful efforts to capture a greater share of the consumer's wallet. I'm also thrilled with our momentum and expansion within international markets and by the increasing mix of own brands as a percentage of REVOLVE's segment net sales that is accretive to our margins. With that as an introduction, I'll step back and provide a brief recap of our Q2 results before reviewing the progress on our longer-term initiatives. Starting with Q2 results, as discussed on our Q1 earnings call, net sales for the second quarter of 2025 had a slow start coinciding with the peak tariff uncertainty in April and historically low consumer sentiment. Encouragingly, our net sales growth rebounded strongly from mid-single digits in April 2025 into the low double-digit growth territory for the months of May and June. All told, net sales for the full second quarter increased 9% year- over- year, driven by domestic and international net sales increases of 7% and 17% year- over- year, respectively. By segment, REVOLVE net sales increased 9% and FWRD net sales increased 10% year- over- year within a global luxury market that declined year- over- year in the first quarter, according to research from Bain Altagamma. The underlying FWRD metrics are very encouraging, further validating the efficacy of our FWRD investments over the past several quarters to capitalize on opportunities created by all the challenges among other luxury retailers. The biggest source of upside for the second quarter relative to expectations was our gross margin performance. Despite the tariff pressures we discussed at length last quarter, we delivered a slight increase in consolidated gross margin year- over- year, significantly outperforming our guidance. Key contributors to our gross margin outperformance in Q2 were continued penetration growth for our own brand offerings, which generate higher margins than third-party brands. The team's outstanding work on tariff mitigation relative to our prior assumptions, as well as the successful testing and rollout of enhancements to our markdown algorithms that drove meaningful improvements in the depth of markdowns in the second quarter relative to our recent performance on these metrics. Speaking of tariff mitigation, while there is still a level of uncertainty thus far, we have been able to successfully mitigate a significant majority of the tariff impacts. Importantly, the severity and abruptness of the tariff served as a catalyst for mitigation efforts that should be favorable to our long-term margin structure, which is exciting. Shifting to our bottom line results, our operating discipline allowed us to achieve a 10% increase in operating income and a 12% increase in adjusted EBITDA year- over- year, outpacing our net sales growth of 9% year- over- year. In addition to our top line growth and increased gross profit we discussed, contributing to our profitability gains were our successful efforts to drive efficiencies in our global logistics operations. Notably, our product return rate decreased by more than 1.5 points year- over- year in the quarter, helping us to achieve nearly 60 basis points of leverage in our variable cost line items of selling and distribution and fulfillment. Most exciting is that our profitable growth once again converted very strongly to cash flow generation that serves as a key competitive advantage. It was our best second quarter performance for cash flow generation in four years, helped by meaningfully improved inventory dynamics. As an illustration of our improved efficiency, our net sales increased 9% year- over- year, while our inventory balance declined 6% year- over- year. Notably, for the first half of 2025, our free cash flow generation exceeded our adjusted EBITDA profitability by $10 million. As a result, cash and equivalents grew to an all-time high of $311 million as of June 30th, an increase of 27% year- over- year. Now, I'll conclude by recapping our exciting progress against our strategic priorities and growth vectors over the past few months. We have a lot of exciting initiatives in play, and our team is doing an excellent job executing on this set of initiatives that we believe can deliver value for shareholders over the long term. First, we continue to efficiently invest to expand our brand awareness, grow our customer base, and strengthen our connection with the next generation consumer. We had an extremely active and impactful second quarter for brand marketing, featuring marquee events such as REVOLVE Festival, REVOLVE in the Hamptons, and more that Michael will talk about in his remarks. Second, we continue to successfully expand our international penetration, highlighted by 17% growth outside of the U.S. in the second quarter. Net sales increased across nearly all regions, including China, which has become one of the top contributors for our REVOLVE segment. In fact, our REVOLVE segment sales in mainland China have more than doubled over the past two years after we invested in a team dedicated to the China market. Their efforts have helped us to capitalize on exciting opportunities, including through successful marketplace partnerships that have fueled our growth acceleration. REVOLVE was recently named the number one cross-border store on the Tmall Global Marketplace within the apparel category, and we recently launched a dedicated REVOLVE man store on the Tmall Marketplace to further expand our reach. Our international results underscore our traction in the attractive growth opportunity overseas that is several times larger than the U.S. market. Third, we have continued to build on the successful expansion of our assortment to gain a greater share of consumer spending. Sales of fashion apparel, beauty, mens, and home products each increased by a healthy double-digit percentage year- over- year, contributing to our reduced return rate and increased revenue per active customer year- over- year. This success, expanding beyond our historical core, further validates our opportunity to drive customer acquisition and expand our share of wallet among our loyal existing customers who trust in our brands and delight in our premium shopping experience. Finally, we are continuing to leverage AI to drive growth and efficiency initiatives across the company, including to refine our shopping experience and personalization capabilities. Building on our successful recent launch of internally developed AI search algorithms for consumer product discovery on our e-commerce sites, during the second quarter, we tested and launched into production enhancements to our AI search algorithms that are delivering great results, including a meaningful lift in conversion rate for search queries on our REVOLVE site. This exciting innovation by our data science team is driving incremental conversion gains on top of the incredible lift in performance that we achieved last year by replacing third-party search technology with our internally developed AI search algorithms for on-site search. To wrap up, I'm very proud of the team for delivering such strong second quarter results and great progress on longer-term initiatives that are critical building blocks for continued profitable growth over the long term, particularly in such an uncertain environment. I'd like to thank our team for your incredible agility, innovation, and commitment that has helped us to navigate through all the tariff uncertainty while remaining focused on delivering excellence for our customers every day. With our talented team, powerful brands, operational excellence, data-driven mindset, and proprietary technology infrastructure, I'm confident that we have the ingredients to power profitable growth and further market share gains in 2025 and beyond. Now, over to Michael. Thanks, Mike, and hello, everyone. The core competitive advantages we have built over the last 20 years continue to set us apart, and together with our strong team, enable us to deliver strong results and market share gains in the second quarter, demonstrating our ability to navigate through this volatile period with huge changes in the effective tariff rates from day to day. Even in such a dynamic environment in 2025, with wildfires, tariffs, and macro uncertainty, in the first half of the year, our revenue increased 10%, our adjusted EBITDA increased 25%, and our free cash flow was more than 5x higher year- over- year. With that as an introduction, I will focus my remarks on some of the strategic areas we are investing in and that we are especially excited about: brand investments, merchandising, forward momentum within the luxury industry, expansion of own brand, and physical retail exploration. First, brand building. Our brand elevating REVOLVE Festival, held in April, set the tone for the second quarter by delivering significantly greater marketing impact and reduced spending year- over- year. Aspirational content from REVOLVE Festival in the Coachella Valley dominated social media feeds during the one-week period around our event. We didn't stop there. We had a very active second quarter for brand building, exciting and delighting our passionate community of consumers, brands, content creators, and partners by hosting impactful events in New York, Miami, the Hamptons, and at Stagec oach Festival in California. Particularly exciting was our multi-week activation in the Hamptons. We engaged our community with REVOLVE summer activations attended by numerous A-listers, co-hosted the vibrant Palm Tree Music Festival, and hosted an experiential pop-up shop in partnership with Vivrelle that remains open through Labor Day. All told, it was our most efficient second quarter for brand building in four years based on the estimated value of impressions generated by our brand marketing investments. Second, merchandising. A key highlight from Q2 was our strong cash flow generation, which benefited from higher inventory turns year- over- year. In fact, we achieved the highest second quarter inventory turns ratio for full-price merchandise on REVOLVE in four years. The underlying drivers are exciting as well. Our vastly improved merchandising on the site and other consumer touchpoints in recent quarters is a key contributor to our improved inventory efficiency, while also driving increased consumer engagement and category expansion. For instance, net sales from our Festival Shop and REVOLVE nearly tripled year- over- year in the first half of 2025, on top of very significant growth last year. Our fashion and editorial merchandising are making it easier than ever for our customers to find what they're looking for, driving improved inventory efficiency. Our merchandising is also helping to generate increased demand in fashion apparel offerings outside of our historical core of event dressing. Sales of shorts have been incredible in the first half of 2025, also contributing to our improved inventory turns year- over- year. Leveraging our data-driven approach, our merchandising team identified the shorts trends very early, and we capitalized by highlighting the perfect short styling for the boho look or for wearing at the beach. I truly believe the combination of our merchandising, editorial, and photography that seamlessly feeds into our brand marketing messaging is second to none and continues to improve. Third, FWRD. Our FWRD segment delivered impressive second quarter results that further validate our strategy on investing through the cycle while the luxury industry continues to face near-term challenges. While many luxury players have reported declining revenue, FWRD net sales increased 10% year- over- year on increased margins as FWRD gross profit increased by 16% year- over- year in the second quarter. At a time when some of the largest luxury retailers are delaying payments to luxury brands for merchandise received, FWRD continues to attract coveted luxury brands as new partners. Illustrating our brand assortment momentum, our recent launch has been FWRD by coveted luxury brands including Phoebe Philo, Victoria Beckham Beauty, Ralph Lauren and the launch of the SKIMs x Roberto Cavelli collaboration. Finally, luxury brands have also been creating in-demand products that are exclusively available on FWRD. In June, we launched our FWRD Summer Club capsule that features exclusive FWRD style for summer getaways from hot brands including Christopher Esber, SIEDRÉS and SAME. Consumer demand for the capsule has been outstanding, resulting in very positive feedback from other luxury brands who are eager to partner with us more closely going forward. Fourth, own brands, where our team has been incredibly agile in navigating the evolving tariff landscape. Despite all the uncertainty, I am pleased to share that our momentum in own brands continues to build strongly. In fact, year-over-year growth of our own brand net sales improved for the fifth consecutive quarter in Q2 and is outpacing our overall growth, leading to increased penetration of own brands. The increased own brand mix of REVOLVE segment net sales year- over- year was a key contributor to our better-than-expected gross margin, as own brands generate much higher gross margins than third-party brands. Since their own brand collections are exclusively available through REVOLVE and FWRD, own brands are a key driver of traffic, new customer acquisition, and net sales at full price. With their underlying metrics for own brands performing better than ever and continuing to outperform comparable metrics for third-party brands, we are investing with confidence ahead of the launch of some exciting new own brands in the next few quarters. I look forward to sharing more in the next quarter's conference call. Finally, physical retail. We continue to be very excited about the growth opportunity in physical retail over the long term. We are making significant progress developing our retail muscle as we continue to build out a team that continues to raise the bar on our go-to-market strategy and operations at our Aspen store, resulting in conversion gains, net sales growth, and phenomenal customer feedback. Our brands have taken notice of our Aspen success. An executive from an iconic Italian luxury brand that we've targeted for years to carry in our FWRD assortment visited our Aspen store recently and was so impressed by our merchandising service and overall aesthetic that we have begun discussions about carrying their iconic brand as part of our in-store assortment. All of this is further validation of the attractive long-term opportunity ahead in physical retail and will be an important driver of success at our soon-to-be open store in Los Angeles. We are on track to open our permanent store in Los Angeles in the fourth quarter, just in time for the holiday season. The store design looks incredible, inside and out, and will beautifully showcase our brands in a prime space within the quintessential shopping destination at the Grove of Los Angeles. Wrapping up, clearly we have a lot of promising growth initiatives in the works that we are very excited about. Our strong financial profile sets us apart, especially in such a dynamic operating environment, illustrated by our profitable growth and cash flow generation that further strengthened our balance sheet to more than $310 million in cash and cash equivalents as of June 30th. This strategic advantage gives us the capacity to invest in long-term success and initiatives that we believe will continue to drive profitable growth for many years to come. Now I'll turn it over to Jesse for our discussion of the financial. Thanks, Michael, and hello, everyone. Our ability to deliver profitable growth again in the second quarter while continuing to invest in long-term growth drivers and at the same time further building our already strong balance sheet is a true reflection of the platform we have built, our operating excellence, and the team's ability to execute. I am proud of the team for delivering strong second quarter results, particularly considering the volatile macroeconomic environment and our slow start to the quarter amidst all the uncertainty around the tariff policy announcements in early April. I'll start by recapping our second quarter results. I will summarize our great progress on navigating tariffs before closing with updates on recent trends in the business and guidance for the balance of the year. Starting with the second quarter results, net sales were $309 million, a year-over-year increase of 9%, representing an exciting milestone of delivering more than $300 million in quarterly revenue for the first time. REVOLVE segment net sales increased 9%, and FWRD segment net sales increased 10% year- over- year in the second quarter. By territory, domestic net sales increased 7%, and international net sales increased 17% year- over- year. Active customers, a trailing 12-month measure, increased 6% year- over- year. Total orders placed were 2.4 million, an increase of 7% year- over- year. Average order value was $300, a decrease of 2% year- over- year that was primarily due to a shift in product mix. Consolidated gross margin was 54.1%, an increase of four basis points year- over- year and well above our guidance range. Contributing to the slight margin expansion year- over- year was a higher mix of own brands as a percentage of REVOLVE segment net sales, partially offset by a lower but still very strong mix of net sales at full price. Now, moving on to operating expenses. Fulfillment costs were 3.2% of net sales, a decrease of 10 basis points year- over- year, albeit slightly higher than our guidance. The year-over-year efficiency reflects a decrease in our return rate, partially offset by a lower AOV year- over- year. Selling and distribution cost efficiency outperformed our guidance at 17.4% of net sales, a decrease of 45 basis points year- over- year. This strong result reflects a continued decrease in our return rate year- over- year, as well as our team's successful execution in driving logistics cost efficiencies, partially offset by a lower AOV year- over- year. Our marketing investment represented 15.2% of net sales, essentially flat year- over- year, and well below our average marketing investment for the second quarters over the past four years. General and administrative costs were $38.3 million, outperforming our guidance of $39 million, albeit an increase of 55 basis points year- over- year as a percentage of net sales. The increase in net sales and gross profit year- over- year and improved efficiency in our logistics costs helped us to achieve solid growth in operating profitability. Our GAAP income from operations increased 10% year- over- year in the second quarter. Now, below the operating income line, there was a big swing year- over- year in other income expense that I'll walk you through next. In the second quarter of this year, we recorded other expense of $2.9 million, a decrease from recording other income of $4.3 million in the second quarter of 2024. This $7.2 million decrease in other income year- over- year is primarily attributable to a $2.8 million increase in unrealized foreign currency exchange losses year- over- year, a $2.4 million non-cash charge in the second quarter of 2025 related to the disposal of a subsidiary, as compared to a bargain purchase gain of $1.9 million related to the acquisition of the same subsidiary in the second quarter of 2024. Now, let me provide some background on the disposal of a subsidiary charge in the second quarter of 2025 and the related bargain purchase gain in the second quarter of 2024. Both relate to a very small acquisition we closed in the second quarter of 2024. We made the difficult decision to cease funding the operations of our majority-owned foreign subsidiary that had acquired the business of French designer Alexandre Vauthier for approximately $400,000 in the second quarter of 2024. Our disciplined approach to capital allocation guided our decision to move on and shift our focus to other initiatives with higher ROI that we believe will maximize the overall returns on our investments over the long term. Our tax rate was 33.7% in the second quarter, as compared to 25.7% in the prior year. The higher-than-expected effective tax rate is primarily due to certain discrete tax items recorded in the second quarter of 2025 that we previously expected to be reflected in the third quarter of 2025. Net income was $10 million or $0.14 per diluted share, compared to $0.21 per diluted share in the second quarter of 2024. This decrease was primarily due to the significant year-over-year decrease in other income and the increased effective tax rate I just mentioned. Adjusted EBITDA was $23 million, a year-over-year increase of 12%, which outpaced our net sales growth of 9%. Adjusted EBITDA margin was 7.4%, our highest quarterly margin in three years. Moving on to the balance sheet and cash flow statement, we delivered strong cash flows in the second quarter. Free cash flow was $9.6 million for the quarter and $52.4 million for the six-month year-to-date period, a year-over-year increase of $42.4 million or 424% compared to the six-month year-to-date period in 2024. Improved inventory dynamics was a key driver of our strong cash flow generation, as net sales increased 9% while our inventory declined 6% year- over- year. Inventory at June 30, 2025 was $221 million, a decrease of $13 million year- over- year. Importantly, we are entering the third quarter with inventory that is healthy and clean, featuring newness that is resonating with our core customer. As of June 30, 2025, cash and cash equivalents were $311 million, an increase of $10 million during the quarter, and growth of $66 million or 27% year- over- year, and we continue to have no debt. Our strong balance sheet and cash flow give us capacity to continue to invest in the business to drive long-term growth, including physical retail and AI, while at the same time opportunistically evaluating strategic M&A and repurchasing Class A common shares to enhance shareholder value. During the second quarter, we repurchased approximately 93,000 shares of Class A common stock at an average price of $18.78. Approximately $56 million remained under our $100 million stock repurchase program as of June 30, 2025. Now, a brief update on tariffs. Over the past few months, our cross-functional team has made excellent progress on tariff mitigation, working closely with our partners and brands to drive a successful outcome. As a result, in the second quarter, we estimate that we mitigated the significant majority of our tariff exposure. We expect that our diversification initiatives will enable us to slightly reduce our sourcing exposure to China for our own brand products starting in the second half of this year and into 2026. We remain thoughtful in our approach, however, keeping a close eye on where the tariffs across regions may ultimately land amidst all the continuing uncertainty. To illustrate the volatility we are dealing with, when we announced our first quarter results and gave guidance in early May, the incremental tariff for China was 145%. By comparison, today, the incremental tariff for China is 30%. While still high, we view the current China tariff level as much more manageable, particularly with our great progress on tariff mitigation achieved in the past few months. Importantly, looking beyond the current tariff challenges that we will continue to navigate for the balance of the year and into 2026, we believe our team's great work on tariff mitigation initiatives has the potential to improve our gross margin over the long run. While the tariff landscape remains very uncertain, we feel much better today about our ability to navigate through the tariff landscape than we did just three months ago, and this is reflected in our improved gross margin outlook I will discuss shortly. Now, let me update you on some recent trends in the business since the second quarter ended and provide some direction on our cost structure to help in your modeling of the business for 2025. Starting from the top, our net sales in the month of July increased by approximately 7% year- over- year. Before we get into guidance, let me caveat that our outlook is based on the current status of tariffs as of today, August 5th, 2025, and our estimate of the impact of potential mitigating activities that are currently underway. Our outlook for gross margin is especially susceptible to variability, given the uncertainty surrounding the timing and level of tariffs that will ultimately be in effect, as well as the timing and magnitude of the potential impact resulting from our mitigation efforts. With that, let's discuss our updated guidance for gross margin, which includes our best estimate for the impact of tariffs net of our mitigation efforts. We expect gross margin in the third quarter of 2025 of between 51.2% and 51.7%, which at the midpoint implies a slight increase year- over- year. For the full year 2025, we now expect gross margin of between 52.1% and 52.6%, which is considerably higher than our prior guidance. At the midpoint, the new range implies a slight decrease year- over- year. Again, this guidance reflects our best estimate at this point, but there are a lot of moving pieces and a considerable amount of uncertainty that remains. Fulfillment. We expect fulfillment as a percentage of net sales of approximately 3.2% for the third quarter of 2025, a slight decrease year- over- year. For the full year 2025, we expect fulfillment to represent between 3.1% and 3.2% of net sales. Selling and distribution. We expect selling and distribution costs as a percentage of net sales of approximately 17.5% for the third quarter of 2025 and a range of 17.2%- 17.5% for the full year 2025, unchanged from last quarter. Embedded in our assumptions are that we will face more difficult return rate comparisons going forward after five consecutive quarters of year-over-year decreases in our return rate. Marketing. We expect our marketing investment to be approximately 14.5% of net sales in the third quarter of 2025 and between 14.8% and 15% of net sales for the full year 2025, a slight decrease from our prior guidance. General and administrative. We expect G&A expense of approximately $38.5 million in the third quarter of 2025 and between $152 million and $154 million for the full year 2025, also lower than our prior full year guidance range. Lastly, we now expect our effective tax rate to be approximately 28%- 29% for the full year 2025. As previously mentioned, the higher-than-expected tax rate in the second quarter is primarily due to certain discrete tax items that we have previously expected to be reflected in our tax provision in the third quarter of 2025. For the second half of 2025, we expect our effective tax rate to be approximately 27%. To recap, we delivered strong Q2 results during what continues to be a challenging and fluid environment. With our highly capable team, healthy cash flow, and rock-solid balance sheet, we are well positioned to navigate the current uncertainty while continuing to invest in the exciting longer-term growth opportunities ahead of us. Now, we'll open it up for your questions. Thank you, sir. I would like to remind everyone it is star one if you would like to ask a question today. We'll take the first question from Nathan Feather, Morgan Stanley. Hey, everyone. Thanks so much for the question and congrats on the strong results. You mentioned in the prepared remarks that some of the tariff mitigation efforts you have put in place so far should help the margin structure long term. Can you help dig in on what's happening there and the potential magnitude of the benefits? Thank you. Definitely. Without getting into specific details, the pressure of the tariffs opened up a lot of opportunities for us to partner with our brands at a deeper level to come up with win-win solutions that apply in this increased tariff world as well as a world without the increased tariffs. We think those partnerships and changes will provide long-term benefits for us. With regards to the margin impact of tariffs themselves, we believe that over time, the pressure from the tariff increases will start to flow through prices over the longer term, and we'll see base margins renormalized while still reaping the benefits of those long-term partnership opportunities. Great. That's helpful. I guess, how should we think about the pricing path when it comes to tariffs and when you might see some of those increases come through both in the own brands and on the partner side? Yeah, sure. We are starting to see more impacts from price increases over time. In Q3, we're seeing about a mid-single-digit broad-based price increase for certain party brands. With Q4, the data is still early, but we're starting to see a bit of an uptick from that. I think we will start to see price increases flow through over time as brands react to the increased cost pressure. With regards to own brand, our strategy on the own brand side is just to stay with the market. Whatever the market is doing, we'll generally be adjusting prices alongside with what the broader market is doing. Very helpful. Thank you. The next question today comes from Oliver Chen from TD Securities. Hi, Mike, Mike, and Jesse. Regarding U.S. versus international, what would you say you're seeing in terms of the [+7] within the U.S. and categories that have been stronger versus weaker? We'd love color on dresses as well. As we think about the margin, Jesse, you called out a lower mix of full-price sales. Is that up against a tough full-price comparison? Will that trend continue in terms of that being a headwind? Lastly, the own brand capabilities. I know you've been through different versions of this. It sounds like it's much more broad-based now, and you're seeing good momentum, but it might be helpful to contrast what you think your capabilities in own brands are versus the past. I know it's evolved in a really positive way. Thank you. Maybe I'll start with the full-price question, Oliver, and then kick it over to you guys. Full-price mix was really healthy in Q2. It was lower year- over- year, but still very healthy and generally in line with what we were seeing in 2019. Very happy with where full-price is shaping out. We are up against what comes from last year. In the back half of the year, it's probably plus or minus in the same zone as we saw last year. I feel good about the mix of inventory, the mix of full price, and also the great progress made on markdown margin. Across the different cuts of margin, seeing really good health there. With regards to U.S. versus international, I'll comment a bit there and then maybe turn it over to Michael for comments on fashion and known brands. Internationally, we saw particular strength in Q2. It was very broad-based. Almost all major regions were up by double digits with just a couple of exceptions. Notably, as we mentioned in the earlier remarks, China has been a great story for us as we invested a couple of years ago in a more localized team and leadership in that area to really help develop that market for us. Over the past two years, we've more than doubled that business. We're really on the REVOLVE side of things. We're really starting to see the efforts of that pay off as well as a lot of our efforts in other regions. Very happy with those international trends. Going directly, Jesse, this continues to be a strong category for us. It continues to grow. We're growing equities faster this quarter than this quarter last year. There's a little acceleration there. We're super proud of our progress across all other categories, as we mentioned. Shorts do quite well. Intimate jewelry, pants, sort of the mix. We're getting a lot of strength there. That has been driven by partner brands, but also been driven by own brands. Own brands, we've been investing for years to really diversify our product offering, and we're having great steady success. I think this is, I think, five quarters of steady year-over-year growth and more diversified penetration, ultimately offering, addressing more needs for our customer across the board versus just that going out. Just categories are feeling really great there. Also noting that it's still quite early in that journey and there's still a lot of opportunity for own brands to continue to expand across categories, across end uses, and other aspects of our customers' lives. Our next question today comes from Anna Andreeva from Piper Sandler. Great. Thanks so much. Congrats, guys. Nice results. On July of 7, should we think FWRD and international are outpacing REVOLVE and domestic? Any other color you could share? I remember last quarter you talked about the shift to more accessible price points. I don't think we heard that this time around. Did that continue in 2Q or quarter to date? We had a follow-up as well. Yeah. On July, we're not going to get too specific there because on a monthly basis, there's a lot of volatility. There was a little more pressure on a comp basis on the international side of the business. Again, it's just a month. We don't want to get into too much there. On the kind of accessible price point note, we had commented last quarter we were seeing pressure on AOV, and that started to improve as we exited April and into May, June. That was the case. We are seeing great progress out of our category diversification. Fashion apparel was up 13% versus dresses, kind of that event wear, which was up 5%. There is some impact there in just product category diversification, which is a good thing and part of the strategy. Okay. That's perfect. That's very helpful. Just as a follow-up on gross margin, did you say what was the impact of tariffs in the second quarter? The 3Q guide is based on gross margin up only slightly despite that easier compare. Inventory is looking very thin. Should we think tariffs will be a greater impact post-mitigation in 3Q? Yeah. In the quarter, in Q2, there was a negative impact from tariff. That was smaller, given that a lot of the receipts don't roll in until the back half of the year, but there was an impact there. That was more than offset by the improvements we made on the markdown margin, markdown algorithm. Also, the great expansion we saw on own brands led to the year-over-year increase in gross margin. If you look at the back half of the year and our guidance there, a slight increase in Q3. For the full year, about 30 basis points below where we were at the beginning of the year. That does reflect some negative tariff impact, greater than it was in Q2. Again, offset by some of the great progress we've made both on own brands and now with that markdown margin. Our next question today comes from Jay Sole from UBS. Great. Thank you so much. Two-part question. One is, can you talk a little bit about the progress you continue to make in lowering the return rate, and maybe talk about prospects for seeing that return rate continue to improve as we go through the rest of the year and into next year? Mike, just on AI, I want to follow this thread. It's been a topic of conversation on the calls for the last few calls. Can you talk about the progress you made in the last 90 days, if you're seeing still good opportunities in AI, or if you started seeing stumbling blocks and roadblocks and hurdles that maybe would prevent utilizing the opportunities the way you envisioned before? Thank you. Yeah, definitely. On return rates, we feel great about all the progress we've made and the initiatives over the past year. As we get into the back half of the year, it is tougher compared, as Jesse mentioned. We would caution moderation as far as expectations there. We still have a number of projects in the pipeline, including some where they require a bit more partnership with the brands, and with everything going on with the tariffs right now, the brands have their hands full. We also want to be smart about how we go about things in terms of the timing of driving improvements there. A lot of stuff is in the R&D phase. I think probably more limited impact in terms of new things in the back half of the year, but I'm hopeful as we enter H1 2026, we'll start to see some acceleration there in terms of projects and initiatives that can bear fruit on that side. In terms of AI, I think 2024 was an incredible year for us in terms of delivering AI-driven enhancements. We still have a lot in the works this year, including continued improvements on the AI search, which was exciting for us. Our original AI search already beat the third-party market leader or one of the market leaders in that space, and then we improved it even further with further conversion rate gains in the most recent quarter. We've deployed voice-to-text technology recently on the customer service side to help us out there. We have some great things in the R&D phase across the board. On the marketing side, we've had some early success with landing page optimization that's driven by AI and that AI really enables in a way that wasn't possible before. We're seeing some nice early results there. Continuing to experiment with AI content in terms of videos, imagery on the marketing side. I think a lot of nice things there. Continued upgrades to personalization, recommendation algorithms on the website utilizing AI. Of course, some bigger things that are more in the R&D type phase could be a bit more transformational just in terms of how consumers shop the website, including some things that are early stage in terms of testing out with consumers like virtual try-on and things of that nature. I think we're just scratching the surface, but the nature of anything R&D is, you know, you'll have some big wins one quarter and then maybe some more incremental wins another quarter. When those R&D projects hit, they can hit in a big way. We're continually very excited with what we're working on there. Up next is Dylan Carden from William Blair. Curious on the inventory initiative, if you can share anything there with regard to discrepancy in sales growth versus inventory growth, which is clearly a positive. I'm curious then, sort of trickling it down to the gross margin line, how much of that is the upside there kind of on the guide is more tariff-related in that sort of swing in China and how much is sort of just better inventory management? Yeah, really proud of the progress we made on that inventory versus sales dynamic. This has been in the works for a couple of quarters, and we made progress over the last couple of quarters, but really good to see that come through in a big way. Importantly, in a really healthy position as we enter the back half of the year and very balanced. That inventory differential and the benefit there is across both segments. Great to see both segments really in a healthy position. On the gross margin, again, feel really good about the tariff mitigation. We've had some upside from the markdown algorithm adjustments, the really healthy inventory, and then also the own brand expansion. I think, as Michael Mente mentioned in his prepared remarks, it's been the best full-price turn we've seen in over four years. If you pull out kind of that COVID post-COVID peak, it's the best we've seen in + 10 years. Really good inventory management. He's been doing a great job there. I know you don't want to get into it as far as sort of the quarterly [diesel], but any context you can give? I know comparisons get harder, is where I'm going with both. Anything you can kind of provide, stack trends or, you know, kind of how things might evolve. Yeah. Again, not much to get into there. To your point, the comps do get tougher in the back half of the quarter based on what we said last year and into the fourth quarter. You know, I think really good performance in Q2 and continue to just drive and manage through the environment. Thanks. The next question is Rick Patel from Raymond James. Thank you. Well done on the great execution in a tough environment. I had a follow-up question on international performance. Are there any updates to share in terms of anti-American sentiment that could be holding back even stronger growth in international markets? How do we think about the durability of the international growth rate going forward? Yeah, we've seen those effects moderate, but I wouldn't say they've completely gone away. I called out almost every region is growing in double digits, but one notable exception is Canada. We're still, I believe, seeing the impact of the negative sentiment regarding America in that region, but it's moderated from its peak, which I think is a great sign. In terms of the durability, we feel great about the international roadmap and the growth durability. China is in the very early stages growing at very significant double digits with both states right now. As that region becomes larger and more important for REVOLVE, of course, the effect of high growth rates can have an even bigger impact on international. I think we have a lot of good things going for international over the longer term, a lot of untapped opportunities, and feel great about our roadmap there. Can you also expand on the enhancements in the markdown algorithms that are benefiting gross margin? It sounds like it was a material tailwind. Just, you know, any way to frame how much it benefited gross margins this quarter and how do we think about the ability to drive further improvement from here? I'll leave to Jesse any commentary on the impact level, you know, to the extent that we disclose it. Yeah, I would say it's a meaningful impact. It was definitely more than just at the margins. I think it goes back to how we are constantly investing in improving our systems and technology and processes to get better and better over the long term. We think that'll continue to be a long-term gross margin. Yeah, it had a very meaningful impact on the quarter. We're excited as we continue to make upgrades in that area and deploy improvements, particularly as AI becomes more important in that area, that there's a lot more to come there as we continue to make investments. Yeah, no specific disclosure on the impact, other than what we've disclosed in that margin did increase, and that offset some of the tariff impact. This only took place, call it, midway through the quarter. Just in the early stages of seeing the impact there, and that's reflected in the full year guidance. Thanks very much. Moving on to Trevor Young with Barclays. Great. Thank you. Michael, just back to the comments on own brands. Is the potentially lower tariff environment changing how you're thinking about investing behind some of those upcoming launches in the back half, maybe allocating a greater portion of marketing budget behind those? Also, how is it influencing how you think about own brand mix and how quickly that could ramp here medium term? Some of the comments in the prepared remarks sounded incrementally more confident around that own brand initiative. Lastly, any implications for inventory growth from some of those efforts to push own brands? Yeah, the stability in the tariff situation gives a lot more confidence. Over the past several years, we've been increasing own brands consciously and investing into products, and it has come with great, great, great results. Some of our best performing own brand products, some of our most expensive own brand products. Some of the upcoming launches are investments into that zone. Feeling really good about that. There will be some, we'll invest meaningfully for an own brand launch, given our confidence in what the product is, given our confidence in what our customers are looking for, gaps in the marketplace, and gaps in our assortment. Super excited about that. I think own brand percentage of inventory will be steadily increasing. There's been a lot of investments both in terms of new brands as well as new capabilities. There will be a steady ramp up there. I think if we tasked with that too aggressively, it could be challenging or a little bit too risky. We see a nice low. The one thing that really could enhance own brands is our physical stores. We're seeing our physical stores really, really perform well. Own brands' products in physical stores perform really, really well. Of course, off a small base in terms of these small stores. We've seen the integration there will be quite natural, quite synergistic, and super exciting. Great. Thank you. The next question is Ashley Owens, KeyBanc Capital Markets. Thank you so much for taking your question. Just on own brands again in tariffs, as you're looking at price increases in line with the broader market, how are you thinking about balancing those actions with demand elasticity to sustain the momentum within own brands? With the mitigation measures in place, how has your view on the need for additional pricing shifted compared to three months ago? When we're looking at our own brand product, we're really comparing to just the broader third-party mix. We've done some blind tests where we're removing tags and testing things against luxury and seeing that own brand pricing is magnitudes more, you know, greater on the lower side, but seeing quality very, very, very comparable. A lot of times, super optimistic, super excited that as we invest in better, higher quality products, the customer buys our higher price points, but also still feels that they are very accessible and quite valued compared to the luxury marketplace. I think that there's a huge, huge opportunity there. Of course, as we invest into world-class talent as well as world-class brands, we think we're giving a luxury power position at a premium price point, and our customer has really connected with it. A lot of, a lot of graphs there. Can't be more proud of the team and the execution there. Thanks. Super. Just to follow up really quickly on M&A, I know that you see funding of Alexandre Vauthier, but you mentioned potentially being opportunistic around some of the future acquisitions in the prepared remarks. What are you looking for now as you evaluate the market, and how do you think about the right type of opportunities that could complement the broader portfolio? I see that there's big gaps in our merchandising mix still. We're really strong in certain areas, but we know our customers shop for other needs in other zones. I think that the right M&A opportunity could really integrate with what our customer comes to us for, but also we're not necessarily providing just yet. It could really accelerate things in that zone. I'm excited to explore. I think our customer has a deep trust in us, and we ultimately have to give her a broader offering, a more diverse offering. Ultimately, we can gain a greater share of wallet, bigger share of closet, and more mind share as well. It also unlocks other marketing opportunities and such. That's the primary thing where we can leverage our scale and distribution expertise into strategic zones that we know are synergistic with our customer base. The next question is Matt Koranda, ROTH Capital Partners. Thanks. A lot have been asked and answered, but maybe just a clarifying question on the gross margin for the third quarter. Is that guidance range taking into account the full impact of tariffs and vendor price increases, or is there still some benefit of sort of the inventory brought in prior to price increases from vendors? Yeah, no, that factors in everything, and that's our best estimate, not only of the tariff rates and where they ultimately land because there's still some uncertainty there, but also our best estimate of our mitigation efforts and the pricing that we're seeing. Okay. On the OpEx, I guess it implies some reinvestment given some of the line items that you guided there, Jesse, for the second half of the year, especially on marketing and selling and distribution. Can you guys maybe just address either specific marketing campaigns or just additional expenses that are impacting S&D in the second half of the year that caused the deleverage? Yeah, on selling and distribution first, this compares to last year Q3 and Q4 where we saw the meaningful decreases in return rates. We're up against those comps, and we're factoring that in as we look ahead. We're still optimistic over the long term that we can continue to work return rate down, but we are up against those tough comps where you saw that great benefit from the return rate reduction. On marketing, just continue to invest, you know, in the core, continue to acquire customers, continue to retain our existing customers. Importantly, in the back half of the year, we have the own brand launches coming up in the next couple of quarters that we'll invest ahead of, and also the opening of the Grove store in Los Angeles that will take some marketing dollars. Our next question will come from Peter McGoldrick from Stifel. Hey, everyone. Thanks for taking my question. Active customer growth accelerated year to date versus 2024. I was hoping you could quantify the areas where you're picking up new customers, whether it be from category expansion, luxury, retail, international, or picking up lapsed REVOLVE customers. Anything you can help with sizing there? Yeah, I think if you look at relative strength, it broadly lines up with the relative net sales growth that we saw. Sorry, the second piece. Oh, on the existing customers, really exciting to see the productivity from those existing customers. An increase both sequentially and year- over- year in the revenue per active customer, and then a sequential increase in order per active customer. Really good results from the existing customer, then continue to acquire those new customers. Very good. Fashion apparel + 13% year- over- year. That's the largest dollar contributor to revenue growth. Can you parse the contribution from expanding assortment from underlying growth within the core product categories? I think it's hard to get too specific on person and outfits. Category expansion and just investments into categories that we have historically been known for as much played a big role in the growth in fashion apparel. It's always going to be a mix between just nuances of fashion trends changing over time in terms of where the dollars go. 100% our continued investment in other categories are starting to play dividends, and I think we're in the very early stages there. The long-term opportunity is quite big if we can make a mark outside these areas we've been traditionally known for. All right, thank you very much. The next question is Janine Stichter from BTIG. Hi. Thanks for taking my question. Can you talk a little bit more about FWRD? It's really impressive the results you've had there, just given how tough luxury's been. Maybe speak about some of the investments you're making there and how you see the share gain opportunities going forward as we go through the next years. Overall, looking forward to share gain, we feel really good about the execution really across the board. It's not necessarily one thing. I believe the buying and merchandising mix has been awesome. The ability to add to brands, especially in a time when some of our most direct competitors, especially in the U.S. marketplace, are increasingly weaker and weaker. There have also been a lot of efforts in higher touch consumer sales. That's been an early area for us where we're seeing great progress there. Of course, being a much smaller business, there are still lots of untapped zones for us to invest in, kind of drafting what we've learned from REVOLVE and what our [S3] is there. Great progress by the team, but also a long way to go. Really great improvements in a number of areas across the board. Great. Maybe just to follow up, curious what you're seeing on beauty, what you've been seeing in that category, and how you see the opportunity there go forward as well. Great progress on beauty, but also still early. I think we're seeing good, healthy growth there, but also knowing that there are a lot of blocking attacks and a lot of nuts and bolts that need to improve basic site experience. Of course, big marketing. We have not invested much in the marketing side at all. It's really been driven by assortment. The next kind of phase that we think will be game-changing will be site experience. A long way to go there, but seeing the initial progress there being quite satisfying. Ultimately, when we're looking at the merchandising mix is world-class and our site experience is world-class, then we can really unleash marketing. Early stages, steady, steady progress and growth, growing faster than the core business, but also a long, long way to go in a big, attractive market. Great. Thanks so much. Next up is Michael Binetti of Evercore ISI. Hey, guys. It's Carson on for Michael. First off, congrats on a nice quarter. Could you break down the merchandising strategy for the rest of the year to help us think about AOV? What does the updated outlook embed for markdowns in the second half? Yeah, maybe I'll comment on the AOV first. I think we had seen some pressure in Q1 and Q2. Our internal modeling had this about flat for the back half of the year. That had some tariff-related price increases impacting that on the plus side, and offsetting that would be just that product category diversification again, where we are seeing great growth in those other categories that generally have lower price points than the core event dressing. There are, of course, just quarter-to-quarter shifts on full-price markdown mix and the FWRD versus REVOLVE mix. Our internal modeling is about flat. As far as merchandising strategy, I think it's, you know, back half of the year kind of mirrors our long-term strategy is really enhance the core and really be the best of what we're really known for, as well as expand, you know, the front to really make progress in areas that we're not necessarily known for. Last year, we had great progress in sweaters and knits, outerwear, ski, kind of cold weather, things that were historically not in our L.A. nature, and we're anticipating more of the same. Overall, feel good about that. Continue the expansion of own brands and launching new own brands, which should be very, very exciting for us. Looking forward to the back half of the year. Great. Thanks, guys. Our final question today comes from Janet Kloppenburg, JJK. Hi, everybody, and congrats on a nice quarter. I had a question on pricing and on mix. I don't know if I'm right on mix, but it seems to me that the way you're sorting the website and the categories you're invested in are driving down the average price point. I'd love you to clarify that for me. Secondly, I was just wondering that as you passed higher prices along in July, have you seen, because of the tariff impact, have you seen some resistance or any resistance from your core customers? Thank you. Yeah, I'll start with the July question. The early read is we aren't seeing significant signs of resistance from customers on some of the price increases we've seen. The data is still early. I'd say the sample set is not large enough to draw a conclusion. Also, as we mentioned, the price increases that we're seeing from third-party vendors do tick up a bit as we enter into Q4. I think the early read is positive, but we have to see how things continue to play out over the course of the year. In terms of the price point and how merchandising mix can be affecting things, I think it's a combination. For Q2, it was a bit of a tale of two halves. In the front half, we did see some impact at times where consumer sentiment was particularly low on the pricing side of things, and that played a role. On the other front, you're right that there was a bit of a mix from merchandising assortment, which can vary quarter to quarter as we make investments in areas of opportunity. I think we'll see that moderate significantly through the back half of the year, just from a strategic standpoint and also with those vendors starting to pass through those price increases as well. We don't expect to see the same trend there in the back half of the year. Okay, thank you very much. Everyone, that's all the time we have for questions today. I will turn the call back to management for closing remarks. Thank you guys for joining us for this quarter, and thank you most importantly to our team. Really proud of all the work that's been done. We agree it's been a nice quarter, a solid quarter, but it doesn't really affect all the hard work that really sets the foundation for great quarters ahead. The macroeconomic uncertainty really is, you know, requires a lot of hard work, but also allows us to really invest and separate ourselves strategically from our competition. Excited for the investments that we have, excited for the future, and excited for you guys to join us for the journey ahead. This does conclude today's conference call. You may now disconnect.